Out of nowhere, Microsoft had an announcement to make. Nothing concrete leaked ahead of the event except that it would be tablet-related. Everybody was skeptical, myself included.

The presentation began and it seemed like more of the same. Don't call it a tablet -- it's the new "Surface"… boring. It's thin, but not much more than existing tablets. It has a kickstand... umm ok. A magnetic cover -- yeah, we’ve seen that somewhere before. Oh, and it doubles as a super-thin keyboard. Wait, what?

That's how the announcement went. Microsoft nailed it. The company used secrecy to build hype, a favorite tactic of Apple, and ultimately managed to surprise most onlookers.

At least on paper, Surface tablets seem great. Here are some deeper thoughts on what Microsoft has done right so far and the challenges ahead.

The Good
  • The hardware is sleek and polished. USB, memory card storage and video output open a world of possibilities while remaining essentially a tablet.
  • The kickstand and covers make this the most PC-like tablets we've seen -- in a good way. Windows 8 completes the package. Whether you like it or not, tons of people have been waiting for a fully functional desktop OS in this form factor, with this kind of polish. I can hear the Apple faithful screaming already.
  • Surface has two versions: one with an ARM chip, another with Intel inside. Some people insist that more than one version is confusing and it might be, but this is perhaps the only way Microsoft can attack low and high-end segments using the same operating system.
The Ugly
  • The brand name. "Microsoft Surface for Windows RT," seriously? Why not just Surface and Surface Pro?
  • The partner backstabbing. Whether HP, Dell and Acer knew about Microsoft developing something is irrelevant. Moving forward, Microsoft will compete for the same customers as their hardware partners. That said, those companies haven't exactly seized their opportunity to rival the iPad. The Surface Pro will not only compete with OEM tablets, but also their ultrabook offerings.
  • Although two versions will let Microsoft attack two price points, the average consumer might think both tablets are the same. The Pro and RT versions resemble each other closely, but the latter is comparatively limited in hardware and software features, which could create confusion.

The Unknown
  • The experience. The single most important factor on any computer today, let alone a tablet. Microsoft may claim that building both the hardware and software gives it a unique advantage, but unlike Apple, Microsoft doesn't have the process down pat. We haven’t really seen Surface tablets working and in action yet. Microsoft must go beyond novelty and deliver instant-on access, great battery life and software that "just works."
  • Availability. Windows RT models will presumably start selling in October when Windows 8 launches, and the Intel-packing, Surface Pro will come 3 months after that. A lot can happen in four months, let alone seven or eight -- we are now talking 2013-ish for the Windows 8 Core i5 models here. Android may appear to be less of a threat today because of the ICS rollout issues, but Google is no sitting duck. Also, as months pass Apple will get closer to the next iPad.
  • Pen input. Microsoft has been obsessed about pen input since the original Tablet PC a decade ago. As long as this doesn't detract from the main tablet experience, I don't see how it could go wrong. With the proper software, it could be a win for Surface especially on corporate environments.
  • Price. Microsoft claimed the RT version would have pricing competitive with current ARM tablets, which could be anything from $400 to $600. The Surface Pro will be closer to ultrabooks, which start at about $800 and can go as high as $1,600. Because Surface is still a few months away, I agree with Microsoft's decision not to set pricing yet. It knows how much the devices cost to build, but to disrupt the market come October, the company will have to undercut the iPad.
  • Distribution. This goes back to Microsoft backstabbing partners. Will Microsoft compete for shelf space with other Windows 8 tablet makers? How will it distribute Surface tablets besides the few Microsoft stores? Will they continue to innovate and support their branded tablets over time, or is this more of a one-time thing?